Ep 314 | 17 Financial Lessons to Teach Your Kids - Part 2

Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. Recently, we did part 1 of the 17 financial lessons to teach your kids. That was last week. You should definitely go back and listen to part 1. Part 1 was lessons 1 through lesson 7. Today, we're gonna jump into lesson 8 and do a few more lessons around the financial things that you should be teaching your kids. Now, if you don't have kids, stick with us because there's young people in your world, there's probably some slightly older people that are in your world as well that probably should hear or at least learn these lessons from you. So, let's jump right in. We're gonna get to lesson number 8. Remember, we did 1 through 7 last week. Go back and listen to those. Today we're on lesson number 8. Lesson number 8 to teach your kids about money, about finances, is to find out how checking accounts work. Kids gotta learn how to fill out a check. They gotta keep track of, track of checks they've written. They gotta look at balances daily or weekly. They gotta understand overdraft fees and monthly bank fees. So your job is to teach them in lesson number 8, how checking accounts work. Now, how can you go about doing this? Simple. Teach them to fill out a check and have them fill it out for you. Then show them how to check the balance, right? So I just had this experience with my daughter Avery where she's been working— she's 13, she's been working in my office as of late— and she was learning how to write a check and how checks process. I mean, remember, she hasn't had it— I don't think she's ever touched a check before. She actually doesn't touch cash all that often in today's environment. She uses Apple Pay or a debit card. It's rare that cash is exchanged. It's even rarer that checks are used. So lesson number 8: teach your kids how checking accounts work and how checks flow out of that account. Lesson number 9: Along the same lines, teach the kids how to use savings accounts. Talk about savings accounts, how they work, how they pay interest to keep money in there, how they don't necessarily cost money, but you have them for a whole variety of different reasons. There's reasons to save. Set some short-term savings goals. Explain how savings accounts work. Now, how can you teach this lesson? When they get a cash gift Ask them how much of it that they want to save for fill in the blank, whatever it may be. Talk about the thing they are saving for and how much more cash they need. So next time your kid gets a cash gift, which still does happen, ask them how much of it they want to save for that bike or for whatever, get whatever material thing they may want or whatever experience they may want. Talk about the thing they're saving for and how much cash they're going to need. Now, the action item for you here might be to open up a savings account for them. So if you're— if you have not set up an account for your kid just yet, maybe you get them both a checking account and a savings account, and then you can teach them how the savings account works versus what we covered in lesson number 8, which is the checking account. Lesson number 10. Lesson number 10. Follow a budget. Making a budget means planning, right, to where your money in fact is going to go. Now, we have to teach the kids that every time we spend money, we got to write down how much we've spent, or we've got to record how much we've spent. There's lots of different ways we can use, you know, use a budget, or I should say put together a budget. Maybe you're using some sort of envelope system for cash so you don't overspend at a store, or maybe you're actually creating a spreadsheet alongside them where you're separating, say, 50% out for spending and, and 10% for savings and whatever it may be. Now, what do I think you can do to teach this lesson? Tell them that you've budgeted a certain amount of money. Let's say I budgeted $40 to make dinner tonight for the family. Take them to the store with you and then let them decide how they're going to spend that $40 to put together a meal for the family. Now, you may get some funny answers or some funny meals, but the idea here is to understand how much money we're working with and then plan accordingly. So, teach them the lesson by giving them a defined amount and letting them go solve for whatever it is you in fact need. In my example, it was, "We're gonna have a meal. Go decide how you're gonna put that meal together at the store." An action item for you, next time you pay them, you know, if you're paying them to do some work for you, which you should be doing if you have kids, Split the cash in the, in the envelopes and say, hey, this amount is going to be towards your spending and this amount is going to be towards your savings, or whatever it may be, so they could see a physical representation of budgeting in action. Let's do lesson number 11. Lesson number 11 to teach your kids, financial lessons to teach your kids. Lesson number 11 is about insurance. And that insurance costs money, but could also save you a lot of money. So, we gotta talk around how insurance works in lesson number 11. What health insurance covers, maybe what car insurance covers, or if you have homeowner's insurance or renter's insurance, teach them how insurance works. Now, how do you go about teaching this lesson? Whenever there's a natural disaster on this planet, which unfortunately is fairly often, When there's a national disaster, talk to them about how insurance will help people that are affected. So look for scenarios that unfortunately play out in life, and I say unfortunately because insurance usually only comes into play when something less than positive occurs. But if you see a fender bender, hopefully nothing too significant, maybe a couple cars pulled out, pulled off to the side of the road, maybe talk about, I use natural disaster at first, but maybe in another way to teach this lesson is, Hey, those cars are pulled over there. Somebody's car is damaged. They have two options. They're either gonna come out of pocket or they're gonna leverage the insurance that they in fact have to have 'cause that's required to drive. So when there's something you observe, bring the kid into the conversation and teach them how insurance works and how the people affected, you know, utilize that insurance. An action item for you, You're going to get an insurance bill in the mail at some point. Show them that insurance bill. Talk to them about how insurance works, how you pay that premium, and how you are in fact covered. Okay, let's go to lesson number 12. Lesson number 12: Make a plan to give away some of your money. I believe it's incredibly important for us as we're teaching our kids financial lessons. These are the 17 financial lessons. We're on number 12. I believe it's really important we teach our kids to donate, to give to others, to be grateful for their blessings, and to use the money to bless others. It's a, it's a beautiful thing. How do you teach this lesson? Take them with you when you volunteer and then give that organization a donation. Remember, these are financial lessons, so show them how you are contributing money and lead by example. Model the behavior for them. An action item: ask your kid who needs money and ask them how much they'd like to give. Now, I know it's a big request. Your kids are likely not making that much money, but even if you can get them to donate a dollar or two, give away a dollar or two to something they care about, I think you ingrain a habit, or you potentially start to ingrain a habit that's going to play out very favorably for them in the future, uh, just in simply making them Great people, good people. So, lesson number 12, make a plan to give away some of your money. Lesson 13, we're going to end with this one today. Lesson 13 is about taxes. Taxes are important. Taxes are important. It's not a political statement. Taxes keep this government, keep this country funded and running. So, taxes are important. The city government, state government, the U.S. government, They all make you give them some of your money, some of the money you earn, and in return, they pay for things like roads and government buildings and parks and these other things that we get to enjoy. We have to pay for them through taxes. How do we teach the lesson that taxes are important? When you drive on a newly paved road, mention that this is where some of your taxes, the taxes you paid went. Or when you bring them to the school that many of them probably love. Not all of our kids love school, but some of them probably like school. Help them understand that if it's a public school, taxes are playing a role. Now, an action item for you: ask the kids, if you were in charge of government spending, what would you spend tax money on? It's a really good question to get them critically thinking. So lesson number 13, taxes are important. This is part 2 of of a 3-part session on the 17 Essential Financial Lessons for Children. Your action items today as parents, as aunts, as uncles, as friends of younger people, your job's to teach these lessons, to make sure that our youth are having financial conversations that many of us did not have when we were their age. I think it's our responsibility, it's our duty. On that note, thank you so much for joining me, the No Days Off Podcast. Do me a favor and remember, every single day brings a new opportunity to get better. So let's get after it.